Renewables becoming competitive in the US

High oil prices have already driven renewable energies such as wind power past the point where they can compete with fossil fuels. But more ambitious policies are needed to spur growth, say two leading think-tanks.

Renewable energies already account for 6% of total energy consumption in the US, according to a report by the Worldwatch Institute and The Centre for American Progress, published on 18 September 2006.

But this proportion could still be dramatically increased if “world-class energy policies” are put in place, say the two US think-tanks.

“Many of the new technologies that harness renewables are, or soon will be, economically competitive with fossil fuels,” says the report, citing dynamic growth rates which are rapidly driving down costs and spurring investments.

According to the report the US boasts some of the world’s best renewable energy resources, which today still remains largely untapped. For example, “one-fourth of US land area has winds powerful enough to generate electricity as cheaply as natural gas and coal,” according to the report. California is currently leading the pack with 31% of its electricity coming from renewable resources (although 12% of it comes from non-hydro). And Iowa produces enough ethanol to meet half of its gasoline consumption. In 2005, the US led the world in installing new wind energy capacity, ahead of Germany and Spain.

However, more ambitious policies – and government support – is needed if the country is to tap the full potential, argue the authors. “Today’s energy system has been shaped by a century of government subsidies and regulatory support,” the authors argue. Now is the right time to start shifting these policies, they say.